Ignite FB Tracking PixelWhich Closing Costs Will I Pay When Buying a Home? - Teresa Boyd

Which Closing Costs Will I Pay When Buying a Home?

by Teresa Boyd 11/19/2018

If you’re a first-time homebuyer, you might be wondering what all of the expenses you can expect to have when it comes time to close on your home.

Ideally, you’ll want to understand all of the closing costs months in advance so that you can plan accordingly. However, even if you’re close to purchasing your first home, it’s still useful to get to know closing costs better.

In today’s post, I’m going to cover the closing costs that are typically the buyer’s responsibility.

Buyer’s closing costs

There’s good news and bad news when it comes to closing costs for buyers. The bad news is that buyers are typically on the hook for the majority of the closing costs associated with a real estate transaction. The good news, however, is that many of these fees will be grouped together as part of your mortgage, meaning you won’t have to devote much time or thought to them individually.

That being said, to ensure that you know where your money is going, here’s a breakdown of the main closing costs that you’ll likely be responsible for as a buyer:

1. Attorney fees

Real estate attorneys research the ownership of the home, ensuring that the seller actually has the right to sell you the property. Though this is usually a formality, it is an important one.

Attorneys can either charge a flat fee or hourly rate.

2. Origination fees

The origination fee is paid upfront to the lender. It’s the fee that they charge for processing your mortgage application and getting you approved as a borrower.

3. Prepaid interest

Many buyers pay their first month’s interest in advance. This is the amount of interest that will accrue from the time you purchase the home until your first mortgage payment is due (a month later).

4. Home inspection

Inspections are one of the closing costs that can save you a ton of money in the long run if they find anything during their visit to the home. Inspectors should be licensed in your state, and you should choose your own inspector based on ratings and reviews (not at the recommendation of someone who is incentivized to sell you the home such).

5. Escrow deposits

Escrow deposits are typically shared between the buyer and seller and it is the fee that escrow agents charge for their services. You can think of an escrow as a neutral third party that keeps your money safe while purchasing a home.

6. Recording fees

All real estate purchases have to be recorded by the local government. Typically, this is performed by the county or town hall. Recording fees are charged whenever a real estate transaction occurs.

7. Underwriting fees

Mortgages are all about determining risk. A lender wants to know whether they will see a return on their investment by lending to you. To do so, they research your credit and income history. The fee the charge for this work is called the underwriting fee.

About the Author

Author
Teresa Boyd

I relocated to Ocean Isle Beach in 2002. Prior to that I lived in Maryland and worked for over 20 years in Washington, D.C. for the D.C. Court system and an office that prosecutes attorneys. I began my real estate career in 2006. 

The first year I worked as a real estate agent, I received the Rookie of the Year award. Each year since I have been recognized as a multi-million dollar sales agent and have consistently been one of the top producers in the company. Coldwell Banker National has recognized me with a Sterling Award for the number of sales transactions closed, The President’s Circle Award, and Coldwell Banker Sloane awarded me with the 2017 TOP PRODUCER Award for the highest sales volume. Long story short, I work hard for my buyers and sellers and it shows in my numbers!

I have been married for 34 years, have four children and eight grandchildren. I have been enjoying the South Brunswick Island area of North Carolina for over twenty years. Part of that time I was a vacationer here but the past 16 years I have called this my home. 

Call me and put my experience & knowledge to work for you. I look forward to working with you!